Pittsburghers know that the times are out of joint. Somehow they're expecting the prosperity to blow up in their faces.
Fortune Magazine, 1941

Tuesday, September 16, 2008

Transit Tuesday

Maybe this is a good time to go back to last Wednesday's PG is a response to KZ's previous Sunday oped on the state of labor negotiations between the Port Authority and its drivers. See: Don't punish transit workers by Joseph J. Pass who I believe is the ATU's attorney. I've mentioned a few of the obvious things that Mr. Pass brings up, namely the bad metrics used for cost of living adjustment and the positive aspects of what workers received in negotiations with the Chicago Transit Authority. I still need to get into that some more because it is not how it has been presented, but I'll get back to that.

There is an interesting factoid in there that would be interesting to dig into. He didn't do the division for some reason, but take this paragraph from the oped:

"over the past 19 years [workers] have contributed from their paychecks more than $100 million to their pension plan while the Port Authority has contributed $30 million. And while the Port Authority was making this contribution for some 5,000 to 6,000 Local 85 employees and retirees, they contributed more than double that amount to the pension plan for only 200 to 300 management employees. "

If those numbers are right that works out to ($30mil/5000=) $6k per worker (I presume he means driver) but a phenomenal ($60mil/300=) $200,000 per management employee. I am suspecting that is off somehow, there is no way that much disparity can be remotely accurate can it? at least I would question it, although past coverage of the issue and especially the list of top pensioners for the Port Authority would seem to confirm the disparity.

36 Comments:

Chris another factor that get's overlooked in this debate is the fact that the Management of Port Authority has a seperate pension fund from the rank and file. Local 85's fund at last check was funded at 111% Managements was funded at 48%. Is there any wonder why this debate is going on? This isn't about saving for drivers retirement it's all about saving managements retirement but with the power of big money interests(Allegheny Conference) the spotlight is on the drivers. As Joe Pass stated in his rebuttal local 85 offered to take retiree healthcare off the hands of management but they have refused this option, my question is why? If this is all about legacy costs then you'd think they'd jump at the opportunity.

Also union employees contribute four and a half percent of their gross earnings for their retirement while mgmt contributed nothing from their pay. Their excuse for all this is that it was a different management team. However some of the biggest players at the time this was going on were Jim Roddey (County Exec) who allowed the DROP program to begin. Dan Onorato's first few years on the job allowed management to remain on their drop program so for him to say that it was a different board of directors is just an attempt to cast the spotlight on others , the board of directed is just a rubber stamp for the county Executive. How many dissenting votes from the board of directed in 44yrs. of Port Authority operations?

I have no idea about the accuracy of your statements. However, proving that the other side is just as greedy is not the same thing as proving that you are right. From my point of view (taxpayer, resident), you and the management and the county exec are on the same side (i.e. the people who take more money from me each year while providing less by the way of useful services).

you're missing what i'm reading mh. there's some pretty clear differences between the "greed" and wasteful practices of the port authority management and the benefits that the union has won over the years. the real rub is the fact that the msm is completely ignoring the former and twisting the facts of the latter.

I don't think I'm missing much. Among the wasteful practices of the Port Authority has been buying labor peace by spending way more of the taxpayer's money than they could get away with if there was actually a competitive political system. They aren't building giant sub-divisions in Butler, Westmoreland and Washington because people enjoy driving for 90 minutes each day.

My point is simple. The city and region can't stop their decline when taxes are so high (and schools so bad) that moving to absurdly distant places like Butler County can save money for an average family even with an SUV and $4 gas.

those giant subdivisions you rail about were built with my taxes too in the form of interstate highways and subsidies for big oil.mh understand something the free markets you love don't exist get that thru that noggin. the non-competitive political system you rail against may be because the majority of people like what the party in power brings it's called Democracy.If you don't like it then you obviously don't care for our country why don't you try Chile or some other bananna republic that you obviously think is great. As far as my city is concerned the density of our population ranks up there pretty highly. Stuff your greed in your objectivist butt your talking points are all KDKA and Allegheny Institute this country did just great economically until your WTO and NAFTA came about to undercut a large middle class. Look up the history of the middle class sometime and see if anywhere something existed like what we had in the 70's. You and your kind rail about taxes but you make sure the worker pays the brunt of them while someone who lives off their capital gains just sits by the pool all day.

I guess since they will be closing down the Port Authority they can stop drilling the other side of the tunnel and start using the one the have for the next X Games, or rent it out for rave parties, maybe hide the homeless there or better yet they can seal it off and make a big piggy bank for Dan onaRATo to store all of his drink tax money that "he stuck his neck out for" good luck in that governors race Dan.

Unlike Ken Zapinski I can admit when I make a mistake it seems that the management of Port Authority contributed the same 4 and a half% as local 85 it's just that it wasn't managed as well as their pension is funded at 48% and the unions at 111% thank's mh, Who loves ya baby? Rumor of the day: Port Authority management's underfunded pension will be rolled over into a 401K????????

First of all, here's the problem: you're all spewing factoids anonymously without any support. Briem doesn't do that, and neither should you. Just because your union president says something doesn't make it true.

Second, you say that you contribute 4.5% of your pay. That is simply incorrect. The PAT website says that Union members contribute 4.5% of total earnings including overtime. The pensions that you draw is based upon total earnings, including overtime. This is exactly how the firefighters underpay the pension.

Finally, retiree healthcare is THE issue. Chris, maybe you could run these numbers: PAT pays for retiree on a "pay as you go" basis. For 5,000-6,000 members, PAT is paying out of its BUDGET for the union members' retiree healthcare. PAT's website says that this amount is $35 million--more than it pays for current employees. If the union/mgmt pensions were paying this amount out every year, they would be underwater.

Frankly, the funded status of the pension or its relative cash payouts is not the problem for management or the union. The problem is that the pension requires PAT to provide healthcare for life. Pensions are a good tool for providing employees' retirement earnings; they are a terrible tool for providing employees' retirement healthcare.

Rachel C and SonGG: MH's point is that people are voting against the current status quo...with their feet. The people and businesses who are leaving the City/County are doing so not because they want to (most people from Pittsburgh love it and hate leaving) but they are moving because the government and the special interests that it serves are not responsive to their needs. Cranberry, Murrysville and Peters Township are overwhelmingly Republican and "government-lite" because that is what people want. And those areas are growing at the expense of Pittsburgh, which is really a shame.

we do have like 8 issues all wound up in this which makes it all hard to deal with.

I probably can't run too many numbers like that.. actuaries spend a lot of time to get these things close to what is correct and then its all dependent on assumptions that we know will be false anyway.

the point that health and pension liabilities keep getting convoluted in the whole debate is pretty important. But it happens on both sides... something I have just begun to realize is this:

I do believe current pension system is overfunded. A good thing, but one of the bizarre parts of the whole issue when you think about how the public debates have been going. But the proposal PAT has includes increasing retirement age from what I read. If that were to go through then the plan should wind up being even more overfunded than it is now. A lot or a little??... see the 2nd paragraph above.... But.. here is something deep in the back of my cynical mind... there are no tax restrictions on reverting parts of overfunded public pensions in say a case of bankruptcy.. at least that is what I understand. I'll leave it at that, and the point may be moot given the stock market of late but still I wonder...

Then you say you believe something on the PAT website, (c'mon please) it's 4.5% CAPPED at 95 hours. See how easy it is to kinda say the same thing but make it sound worse. KZ does it all the time.

I think the retiree healthcare issue should be a moot point considering the offer made by the union. (Pay attention; I doubt you'll find that on PAT's site).

I guess people are moving to cranberry because transit workers are making a decent wage, and they would rather live next door to someone who makes a higher wage. I guess you also mean UNIONS are a special interest group. Typical. I'd ask you to please move to one of those places (if you don't live there already) but then you would have the luxury of a nice bus, not the buses reserved for us common Pittsburgers

unsubstatiated claims that's a good one that's all I ever hear from your side is opinion. Chris spews statistic upon statistic fact upon fact and the first response I get from MH is a personal attack. Address the blog, your the one's who disputes Joe Pass's rebuttal about local 85 being responsible in their pension fund after all that is the subject isn't it?

As for why don't I move to out to Cranberry or somewhere, a couple of years ago I decided that in the long run (twenty years or so), I'm probably better off in the city. I think the machine is dying just slightly faster than it is killing Pittsburgh.

clearly my post is an answer to your statement and it also clearly threw us off the subject of Joe Pass's rebuttal. If KZ thinks the Chicago agreement was great then we're all in luck as right here in good ol Pittsburgh we have the attorney who brokered the agreement. Now let's dispute what Joe Pass has to say as far as negotiations go or would we also say he spouts unsubstatiated claims.

Yes, because only objectivists and Chileans have found any problems at all with local services or tax rates. As to Joe Pass's rebuttal, I don't see details on your site and haven't seen them elsewhere. I'm wondering if maybe it doesn't take that $90 million in savings right back out of the taxpayers' pockets.

With respect to the CTA situation, based upon the summary of the website of www.juliehamos.org, a funding bailout of $1.1 bil for the pension and $528 mil for "seeding" (not fully funding, mind you, but seeding) the retiree healthcare costs was funded by a host of new taxes. I'm not sure what, if any, lesson should be drawn from anyone who "brokered" such an agreement.

Massive new tax increases and a huge pension bailout...hmmmm...I think the City of Pittsburgh already beat PAT to that one.

Pass's rebuttal doesn't really address the underlying issue: where is the $700 million necessary to fund retiree health benefits going to come from? Aside from huge new tax or fare increases, are there any realistic ideas out there for this?

MH you'd find a problem with anything that doesn't benefit you directly. Do you also have a problem with Police and Fire departments? I thought KZ touted the CTA agreement now your telling me it was bad what gives? Also I don't think local 85 is asking for a pension bailout where does that come from? It's so easy for you to criticize my profession why don't you come clean and allow us the same freedom to know what you do for a living.

I think the obvious point is that any assertion that says local drivers are unwilling to make concessions similar to their counterparts in Chicago, yet fails to mention the large $ amounts the workers in Chigago received in exchange, becomes a fairly meaningless analogy.

Kind of an aside, but it would be an interesting background kind of story for the media to talk to the lawyer to get his take (which I am sure has to be biased as a matter of lawyerly ethics I believe) on the differences between negotiating with the Chicago folks and with the PAT folks here.

It's another topic altogether, but I was looking at some of the assumptions in PAT's health care liability projection. Nothing wrong with them, but they do have far more conservative assumptions than say the city's pension actuary reports. If I had to choose I would choose PAT's, but what it means is if compared by similar methods either the city's already predicament is far worse than we think it is, or PAT's OPEB issue is not as bad as it may appear. I'll try and get into that in the future, but it is so far off the deep end quant wise.

I got on the Reps. website and she seems like the kind of politician we could use. Read this http://juliehamos.org/news/newsitem In case you don't she states how their legislature worked hard to find funding for their transit to avoid service cuts hmm what am I missing.

SonGG, I think that you are completely missing my earlier point. Only PAT is having these kind of problems and complaining about a lack of money. After Act 44, every transit agency in the state is experiencing higher ridership and higher funding. Act 44 provided the dedicated state funding that PAT was always searching for like the Holy Grail. SEPTA has double digit increases in ridership and is actually increasing service:

SEPTA receives the same percentage of funding as PAT, but its retiree health care cost is only a fraction of PAT's and its drivers are paid the same amount in Philly as PAT's are paid in the 'Burgh. Simply put, a transit dollar in Philly goes towards more service than it does here. The only answer is that PAT's cost structure is higher.

Now, you can blame management, but if wages, benefits, pension, retiree healthcare and fuel costs account for more than 90% of the budget, what else should management do? No tires on the buses? No pens at meetings? It's the cost structure that's broken, not from a lack of funding, but from an inability to rein in long-term pension and health care liabilities. If the solution is simply more money, more money, more money, than that doesn't really seem like a solution at all.

Not for one second do I or anyone else who works at PAT believe their ridership figures they are whatever they want them to be.As far as adding service goes it matters not what the ridership would be for that particular route they won't do it period. Your absolutely right about rising costs in healthcare and fuel but is that not a societal problem? I know local 85 would increase their % to pay for rising costs in healthcare but the authority has no intention on negotiating this it's all about their using of tax dollars for a private carrier to get in on the fun. Dan Onorato mentions a public-private partnership Steve Bland mentions a heavy legislative agenda. This crisis actual or perceived(i'll call it perceived) is their way to implement change. As far as i'm concerned it's all about connecting the dots you can dispute that part because it doesn't affect you, me, I don't have that luxury.

Just for the sake of debate i'm wondering how many of you naysayers don't agree with what I say concerning the public-private partnership that I feel is the true reason behind these contract negotiations failing.

For starters, I actually ride transit and from where I stand (in the aisle of the 61c, being smacked by the backpacks of four students at once as we drive by dozens who couldn't even get on the bus), it is only a slight exaggeration to say there is a crisis in transit. There is a very clear crisis in city finances. The Pittsburgh schools (losing students quickly and narrowly averting a state-takeover) are in crisis. Let's just say that you'll have to do something more than shout "Oh no, the private sector is coming" to persuade me.

SonGG, I don't think that there is any appetite or political support in SW PA for privatization.

With that out of the way, what are you saying about PAT's ridership statistics? Are you saying they are too high or too low? For my part, I have seen operators repeatedly punching the rider button on the cash box even though few riders have boarded. If they rely on that mechanism for counting ridership, it must be too high.

I think you're saying that any crisis in transit is overblown I couldn't agree more so why is Steve Bland saying the Authority will be out of capital in a few weeks? I'm glad to hear that you don't think there is an appetite for privitization of our transit. I'm not sure I agree though maybe not from the public end but from the corporate end I hear lot's of rumbling on this subject (KDKA Allegheny Institute) About the ridership stats i'm saying for every operator who overcounts there's three who undercounts(including myself) but management will use those factoids for what ever suits their motive as re: If we can say we have the highest operating costs per mile in number of passengers hauled we'll adjust those figures to suit our needs. You don't actually think at contract time they'll say ridership is rising at record rates and our operators are working at peak efficiency do you? What independent agency calculates what their ridership actually is I know of none but obviously their is a need for public transit when you can't get a seat on a 61C or any other number of routes. Are they too high or too low I have no idea but I know when it comes to contract time i'll always hear how their operating costs are too high

SonGG,I was always under the impression that the "real" stats that could be relied upon (and gamed the least) were service hours/miles vs. revenue (actual cash/passes sold). By that measure, Philly still crushes PAT. Why is that?

Even if the ridership is too high/low, does that fundamentally matter? Without enough money, won't PAT eventually stop paying its employees, including the undercounting bus drivers?

I'm going to chime in on that point. I am pretty convinced that all the efficiency measures.. which include thinks like cost per mile or per rider or anything are actually being driven by something else. Basically the level of service provided here by some measures is higher. Things like # of stops, or # of routes or miles driven all generate higher costs than lots of other systems. The wage differentials (whether adjusted or nominal, lets forget that debate for a minute) really don't account for that much of the relative differences in costs. But here is the thing... all those 'inefficiencies' are also what generates the other statistic that used to be true.. namely that our transit ridership is much higher than lots of comparable sytems.. more people use the system because we have(had) more inefficent suburban routes.. more stops, more service. All these other debates cloud the real choice going on here. Maybe we want less transit service as a region because the costs of supporting what we had in the past has become unsupportable. But you can't have it both ways and to generate relatively high usage you have to be willing to pay for it. Basically most of the public debate over this particular labor negotiation, but more so the debate over the route cuts are just the wrong debates to be having.

Chris, I get your point, but I think the answer depends upon demographics and geographic distribution (not to cull from KZ's blog too much). Stop distribution in ratio to miles traveled is the real measure of inefficiency in any transit system. Moreover, the sheer number of stops, even if they are not used and therefore don't slow down the system, create even greater misperceptions of "too much/inefficient service". The # of stops in, say, Beechview were acceptable when Beechview was packed with people in the 50's, but now is unacceptable because you have to stop the T every two blocks to pick up one person. It slows down the T, annoys riders and drivers alike, and provides little practical benefit.

The Pittsburgh region rates extremely high in the sprawl indices and at the same time is losing population (and has unavoidably beautiful yet terrible geography to deal with, which also contributes to sprawl). I think that this should be the real focus of the PAT service debate. The double-whammy of driving farther into the suburbs to pick up fewer people is the problem and what drives the underserved citizens of Oakland and Squirrel Hill crazy, too. That creates service inefficiency that all the labor savings in the world won't/can't cure.

The question really comes down to whether the Pittsburgh region (including its suburbs and exurbs) can or should provide that level of service. Based upon cost alone, the answer is that most people--especially the suburbanits--don't seem to think so. That should be the only debate, not whether you can save $2 million on some labor provision, but whether you should spend the $2 million at all.